European Regulators Back Plan for a Fine on Microsoft

By PAUL MELLER

Published: July 4, 2006

Antitrust regulators in the European Union gave unanimous support on Monday to the plan by the European Commission to again fine Microsoft for failing to comply with a 2004 ruling against it, people following the case said.

Microsoft now faces a new fine of hundreds of millions of euros. The commission, which acts as the main competition authority for the 25 countries in the European Union, told Microsoft in December that it had failed to comply with the March 2004 ruling.

Since then, the commission has said that the company could be fined up to two million euros (about $2.6 million) a day.

''We have differing views regarding compliance, but we are hoping that despite this, we can get to a point where we can move on from here,'' Brad Smith, the legal counsel for Microsoft, said in a telephone interview.

The commission refused to comment on the closed meeting Monday with the national regulators.

People tracking the meeting said there had been some debate about whether to push ahead with a new fine now, as Microsoft prepared to submit information that it hoped would meet the requirements of the 2004 ruling.

In that ruling, the commission found Microsoft guilty of withholding information about its Windows operating system and ordered the company to release the data to restore fair competition.

Initially, Microsoft contended that it had submitted adequate information. But in April it said it finally understood what was being sought.

Since then it has been working with the commission and the trustee, Neil Barrett, a computer specialist selected by Microsoft to monitor its compliance with the 2004 ruling.

Microsoft said in a statement on Monday that it was dedicating a large amount of resources to ensure that it met the aggressive schedule and the high standard set by the commission and the trustee.

Some national regulators were expected to call on the commission to back off, at least until the final batch of technical information has been submitted. It is due by July 18, according to deadlines agreed to by the commission, the trustee and Microsoft.

But there was no real attempt to put the brakes on the process. On the contrary, the national regulators were all behind the commission, said one of the people with knowledge of the case. The next step is another meeting between the commission and national regulators next Monday to decide how much to fine Microsoft for failing to honor the 2004 ruling.

If the commission fines Microsoft two million euros a day, as it has threatened, the fine would total over 400 million euros, nearly as much as the first fine two years ago.

However, part of the two-million-euro daily fine will be reserved as a punishment for failing to set an appropriate price for a license to use the information being submitted, and the pricing issue has yet to be dealt with.

''It's impossible to say how much of the two-million-euros-a-day fine will be for failing to submit the required information and how much will be for failing to sell the license at the right price,'' said another person following yesterday's meeting.